Takealot could double in size — analyst

Takealot’s current growth rate could see the ecommerce store double in size if it can maintain its trajectory, the Sunday Times reported.

Mergence head of equities Peter Takaendesa told the paper that this is despite increased competition in the digital shopping space.

“We expect the Takealot Group’s companies to continue to gain market share as they leverage international expertise shared through Prosus and a strong balance sheet to drive scale,” he said.

“If the business continues to grow at current rates it could double in size over the next 18-24 months.”

The online retailer saw revenue growth of 63% (to R5.5 billion) and a reduction in trading loss from R98 million to R33 million in the first half of 2021.

“This is an improvement of 67%, driven by higher gross margins at Takealot.com’s general ecommerce platform and Superbalist, which improved trading profit margins by one percentage point and nine percentage points respectively and are nearing profitability,” Naspers stated.

According to Takaendesa, these improvements are primarily due to the shopping from home trend that increased significantly during the Covid-19 pandemic.

Naspers agrees with this notion, saying that the ecommerce group — which consists of Takealot, Mr D Food, and Superbalist — continued to benefit from the shift to online.

“Mr D Food, delivered strong results with order volumes growing 88% as consumer spending shifted from restaurant dining to online delivery,” Naspers stated.

“Superbalist grew revenue and trading margins despite increasing competition from brick-and-mortar fashion retailers.”

Naspers’s operations in the country include Takealot, Media24, and Foundry, which generate a revenue of R15 billion.

Media24 recorded a rise in revenue to R2.1 billion (a 54% rise), largely thanks to online growth.

Naspers also said it plans to bolster the South African employment market by creating 10,000 jobs by 2026.

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